Page 391 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule
(a) ‘P’ represents the proceeds attributable to B;
(b) ‘R’ represents the total amount of proceeds as determined in terms of paragraph 35 in consequence of the disposal
of the pre-valuation date asset;
(c) ‘A’ represents the amount of expenditure allowable in terms of paragraph 20 in respect of the asset that is incurred
on or after valuation date;
(d) ‘B’ represents the amount of expenditure incurred prior to the valuation date in respect of that asset that is allowable
before, on or after the valuation date in terms of paragraph 20.
[Item (d) substituted by s. 70 (1) (b) of Act 31 of 2005.] [Sub-para. (2) substituted by s. 77 (1) (c) of Act 74 of 2002.]
(3) A person must determine the time-apportionment base cost of a pre-valuation date asset in terms of subparagraph (4) where—
(a) that person has incurred expenditure contemplated in paragraph 20 (1) (a), (c) or (e) on or after the valuation date; (b) any part of the expenditure contemplated in paragraph 20 (1) (a), (c) or (e) incurred before, on or after the valuation
date is or was allowable as a deduction in determining the taxable income of that person before the inclusion of any
taxable capital gain; and
[Item (b) substituted by s. 48 of Act 20 of 2006.]
(c) the proceeds in respect of the disposal of that asset exceed the expenditure allowable in terms of paragraph 20
incurred before, on and after the valuation date in respect of that asset.
[Sub-para. (3) added by s. 77 (1) (d) of Act 74 of 2002 and substituted by s. 70 (1) (c) of Act 31 of 2005.]
(4) The time-apportionment base cost of a pre-valuation date asset referred to in subparagraph (3) is determined in
accordance with the formulae—
and
where—
(a) ‘Y’ represents the time apportionment base cost of the asset;
(b) ‘P1’ represents the proceeds attributable to the expenditure in B1;
[Item (b) substituted by s. 70 (1) (d) of Act 31 of 2005.]
(c) ‘A1’ represents the sum of the expenditure allowable in terms of paragraph 20 in respect of the asset that is incurred
on or after valuation date, and any amount of that expenditure that has been recovered or recouped as contemplated
in paragraph 35 (3) (a);
[Item (c) substituted by s. 70 (1) (d) of Act 31 of 2005.]
(d) ‘B1’ represents the sum of the expenditure allowable in terms of paragraph 20 in respect of the asset that is incurred
before valuation date, and any amount of that expenditure that has been recovered or recouped as contemplated in
paragraph 35 (3) (a);
(e) ‘B’, ‘N’ and ‘T’ bear the same meanings ascribed to those symbols in subparagraph (1); and
(f)
‘R1’ represents the sum of the proceeds and any amount contemplated in paragraph 35 (3) (a) in respect of that asset. [Item (f) substituted by s. 70 (1) (e) of Act 31 of 2005.]
[Sub-para. (4) added by s. 77 (1) (d) of Act 74 of 2002 and amended by s. 98 (1) of Act 45 of 2003.] (5) For purposes of this paragraph—
[(P 2B)3N] Y 5 B + ___1____1_____
T1N R3B
P1 5___1____1_ (A1 1 B1)
[Item (d) substituted by s. 70 (1) (d) of Act 31 of 2005.]
(a) any selling expenses incurred on or after the valuation date must be deducted from the following amounts—
(i) in the case where subparagraph (2) or (3) applies, the amounts represented by the symbols ‘R’ and ‘R1’,
respectively; and
(ii) in any other case, the amount represented by the symbol ‘P’;
(b) except for subparagraph (3) (c) any reference to expenditure allowable in terms of paragraph 20 must exclude selling expenses; and
(c) ‘selling expenses’ means expenditure—
(i) contemplated in paragraph 20 (1) (c) (i) to (iv) incurred directly for the purposes of disposing of that asset; and
(ii) which would, but for the provisions of item (b), have constituted expenditure allowable in terms of paragraph 20. [Sub-para. (5) added by s. 70 (1) (f) of Act 31 of 2005.]
31 Market value
(1) The market value of an asset on a speci ed date is in the case of—
(a) an asset which is a nancial instrument listed on a recognised exchange and for which a price was quoted on that
exchange, the ruling price in respect of that nancial instrument on that recognised exchange at close of business on
the last business day before that date;.
[Item (a) substituted by s. 83 (1) (a) of Act 60 of 2001, by s. 49 (b) of Act 20 of 2006 and by s. 62 (1) of Act 8 of 2007.] (b) an asset which is a long-term insurance policy, being a policy as de ned in section 1 of the Long-term Insurance Act
the greater of—
[Words preceding subitem (i) substituted by s. 131 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.] (i) the amount which would be payable to the policyholder upon the surrender of that policy on that day; or
(ii) the amount which according to the insurer is the fair market value of that policy should it run its remaining policy term as determined on that day;
(c) an asset which is not listed on a recognised exchange which constitutes a right of a holder of a participatory interest in— SAIT CompendIum oF TAx LegISLATIon VoLume 1 383
INCOME TAX ACT – SCHEDULES